The planned transaction is a further step in Nokia Siemens Networks' transformation into a mobile broadband specialist and will give both companies the opportunity to concentrate investment and strategic focus on their core segments.
"During 2012, Nokia Siemens Networks made tremendous progress in transforming our company into a specialist in the world of mobile broadband. Our strategic focus on our core markets has allowed us to concentrate our energy and investment in areas such as LTE, where we have strengthened our global leadership position," said Rajeev Suri, CEO of Nokia Siemens Networks. "This transaction builds on that momentum and aims to provide a new home for the Optical Networks business with the focus, resources, and strategic flexibility to address opportunities in the optical market."
Marlin Equity Partners, a Los Angeles-based private equity firm with over $1 billion in assets under management, has formed a new company and intends to act as a consolidator, building an industry leader in the fragmented optical networking sector.
“We are making a significant investment in this sector, and they have substantial capital under management that will be used as a catalyst for consolidation,” said Nick Kaiser, co-founder and partner at Marlin Equity Partners.
Pat DiPietro, telecom operator partner at Marlin Equity, added: “We intend to make the necessary investments to deliver market-leading optical network solutions and enhance the long-term value already available to our global customer base.”
The new optical company will be headquartered in Munich, Germany, with operations worldwide, and will be led by its current management team with Herbert Merz as CEO.
“This transaction is very exciting for the company, as it will give us the opportunity to build long-term leadership in the optical market and the strategic flexibility to be proactive in the market,” said Merz. “Marlin is the ideal owner for this business, as it is a long-term investor with a proven track record of success in our industry and direct experience working with some of our customers.”
Optical Networks is a leader in the long-haul and ultra-long-haul segments of the optical market, with strong technology in the emerging 100G optical transmission area and a global Tier 1 customer base.
As a result of the transaction, up to 1,900 employees—primarily in Germany, Portugal, and China—from the optical business unit and related functions are expected to be transferred to the new company in accordance with local legal requirements. Existing related customer contracts are also expected to be transferred. The transaction is expected to close in the first quarter of 2013.
Closing is subject to certain customary closing conditions, including, but not limited to, antitrust clearance procedures.
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